cultivation Archives - Green Market Report

Adam JacksonAugust 22, 2022
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4min880

The Greenrose Holding Company Inc. (OTC: GNRS, GNRSW) posted increasing losses for the consecutive quarter as its cultivators navigate demand headwinds. The multi-state cannabis SPAC (special purpose acquisition company) reported its second-quarter financials ending June 30, 2022.

While Greenrose reported approximately $9.2 million in rising revenue during the period, the company’s second-quarter net losses totaled $10.3 million, down 132% sequentially; versus a net income of $3.3 million in the same period last year. The earnings were a loss of $0.63 cent per share versus a loss of $0.92 cents in the first quarter.

The company attributed the loss to production interruptions at True Harvest and demand headwinds in the Connecticut market, as well as increased interest expense of $6.9 million, purchase accounting fair value inventory step-up of $2.2 million and intangible amortization expense of $4.0 million.

Theraplant said its second quarter revenues decreased year-over year as a result of “sustained demand headwinds in Connecticut’s medical market, as well as increased competition and impacts from the state’s illicit market.”

The company attributed True Harvest’s second quarter-revenue to production disruptions “stemming from construction on our additional grow rooms.”

“While we continued to incur higher costs associated with ramping our expanded cultivation capacity at both True Harvest and Theraplant, we believe this work improves our positioning for improving our operations in Arizona and preparing for Connecticut’s forthcoming recreational market, respectively,” CEO Mickey Harley said. “As we progress into the second half of 2022, we remain focused on leveraging our existing production efficiencies to deepen and expand our presence in our existing state markets.”

In Connecticut, Greenrose said that the company and its partners tried to apply for four retail licenses and two hybrid retail licenses as part of the state’s equity joint venture (EJV) program, but were denied Connecticut’s Social Equity Council.

“We are working to address deficiencies in the applications,” the company said.

Greenrose posted second-quarter adjusted EBITDA of $3.1 million versus $4.6 million in the prior year quarter. The company said the slump was “primarily driven by the aforementioned lower level of gross profit generated during the quarter, higher corporate general and administrative expenses, and costs related to ramping the Company’s production capacity at Theraplant and True Harvest.”

The company recorded cash and cash equivalents combined with restricted cash at $2.7 million versus to $9.1 million in the period ending December 31, 2021. It said the decrease was driven by acquisition-related expenses and debt obligations.

Greenrose suspended its previously stated full year 2022 guidance “Due to regulatory delays surrounding the expected timing of Connecticut’s recreational cannabis market…The Company expects to re-evaluate and provide further updates on its 2022 outlook as regulatory visibility improves.”


Adam JacksonAugust 15, 2022
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5min1480

Agrify Corporation (Nasdaq: AGFY) up-ticked in early trading Monday despite the company posting results far below analysts’ expectations — showing the waning demand for hydroponics amid the economic slowdown.

The data-forward cannabis cultivator delivered its financial results for the first quarter ending June 30, 2022. Agrify delivered approximately $19.3 million in total revenue during the period, a gain of 63.5% versus the same period last year — though missing the Yahoo Finance Average analyst estimate for revenues of $26.1 million.

The company also reported a second-quarter net loss of $93.4 million versus a net loss of $9.4 million in the same period last year. The earnings were for a loss of $3.51 per share, below analysts’ loss estimates of $0.43 cents a share.

“The second quarter was challenging for the entire cannabis industry,” said CEO Raymond Chang. “Despite this difficult business environment, which has impacted our recent performance and altered our outlook for the remainder of 2022, we are actively taking steps to adapt to the new market realities.

Agrify said that its operating expenses totaled $93.1 million for the second quarter versus $6.0 million in the prior year period. Operating expenses were $107.1 million for the year-to-date period versus $11.9 million in the prior year-to-date period.

“The comparative 2022 increases in both our second quarter and year-to-date operating expenses are largely attributable to impairment charges of $69.9 million, increases to reserves associated with accounts receivable, loans receivable, inventory obsolescence, and warranty costs, increases in depreciation and amortization, and changes in contingent consideration related to the fair value estimates associated with ongoing acquisition-related earnout arrangements,” the company said.

Agrify is lowering its guidance for 2022 revenue, “Given the current difficult macro business environment, and specifically a drastic downturn in the cannabis industry,” it said in a preliminary release statement last week. Agrify’s new forecasted range for revenue is $70 million$75 million, far below a range of $140 million and $142 million in the previous quarter.

Adjusted EBITDA was a loss of $19.4 million in the second quarter of 2022, versus a loss of $4.5 million in the same period last year.

“We have adjusted our near-term strategy and priorities to focus on the most immediate and impactful revenue-generating opportunities, all without compromising our ability to capitalize on the expected long-term growth in the sector,” Chang said. “In parallel, we are also in the process of restructuring our credit facility and reducing our operating expenses to strengthen our cash position. We remain steadfast on bringing new and innovative solutions to our customers and delivering value to our stakeholders.”

Warning Signals

Last week, the company gave the market a heads-up that it took a big write-off in the quarter, saying it is conducting an impairment analysis. That write-off is expected to result in “significant non-cash impairment charges.” In addition to the write-downs, Agrify said it talked to its lenders to change some of the financial covenants regarding its debt.

Stifel analysts Andrew Carter and Christopher Growe earlier the month published an earnings preview report, saying that the  “2021/2022 hydroponics recession has been deeper and longer than we originally anticipated with a significantly greater impact to our covered companies than we originally anticipated.”

“But, we contend the hydroponics category will at minimum regress to the underlying demand for cannabis (HSD) with an improvement in durables demand eventually taking hold,” Carter said, adding that he believes it will take time for enthusiasm to return to the sector of hydroponics.


Adam JacksonAugust 4, 2022
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3min1640

Innovative Industrial Properties, Inc. (NYSE: IIPR) posted positive results as it continues to inject capital into the cannabis real estate landscape. The real estate trust released results for the second quarter ending June 30, 2022.

The company saw $70.5 million in total revenue this quarter, a 44% gain from $48.9 million for the same quarter last year. The increase was mostly due to the acquisition and leasing of new properties, additional improvement allowances and construction funding at existing properties resulting in adjustments to base rent as well as contractual rental escalations at certain properties.

Last quarter, the company missed expectations as it delivered total revenues of approximately $64.5 million during the period — missing Yahoo Finance Average analyst estimate for revenues of $67 million.

IIP posted net income of $39.9 million for the quarter at $1.42 per diluted share. The company also posted an AFFO of $60.1 million. IIP paid a quarterly dividend of $1.75 per common share on July 15 to stockholders — a 25% increase from last year’s second quarter dividend — equal to an annualized dividend of $7 per share.

The company made four property acquisitions in Arizona, Maryland, Massachusetts and Texas while also executing five lease amendments to provide reimbursement for additional improvements at properties in Illinois, Michigan, New York and Pennsylvania.

On the balance sheet, the company posted 12% debt to total gross assets with approximately $2.5 billion in total gross assets. This represents a total annual fixed cash interest obligation of around $16.7 million with no debt maturing until 2026.

The company said it collected 99% of rent and property management fees over the first two quarters this year.

IIP now owns 110 properties located across the country, representing approximately 8.6 million rentable square feet including 2.2 million under development. The average remaining lease term is around 16 years. The company invested around $2.1 billion across its portfolio and committed an additional $209.6 million to fund draws by certain tenants and sellers related to construction and improvement at company properties. That does not include an $18.5 million loan commitment to a developer for construction of a regulated cannabis cultivation and processing facility in California.

IIP’s stock was trading at $100.27 in pre-trading Thursday morning, a 3.19% gain from $97.17 in the previous day.


Kaitlin DomangueNovember 3, 2021
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8min1040

Cannabis is the fifth most valuable crop in the United States, effectively beating cotton. 

Farmers grew $6.175 billion worth of cannabis last year. That’s enough to fill 57 Olympic-sized swimming pools. Or, you can fill more than 11,000 dump trucks, stretching more than 36 miles. And that’s only across 11 adult-use states, not even including medical marijuana! 

With a crop this huge, you’d expect more data to be collected. The USDA Research Service keeps track of all non-cannabis crops, but they don’t account for cannabis produced in legal states because it’s illegal at the federal level. 

That’s why Leafly is stepping in to try and keep track of what’s being grown in the United States. Their new Cannabis Harvest Report for 2021 proves just how valuable American cannabis is to consumers and farmers alike. Leafly does the same thing with cannabis jobs, which are not tracked by the Department of Labor. 

Quick Data for the United States

  • This report analyzes 13,042 cannabis farms across 11 adult-use states. All of the states in the report have an active recreational program and operational retail stores.
  • Cannabis’ value in the United States is beating cotton, rice and peanuts. Cotton was worth $4.7 billion in America last year.
  • Corn, the nation’s leading crop, was valued at a whopping $61 billion last year. Corn, soybeans, hay, and wheat are the four crops that beat cannabis in value.
  • Cannabis is the #1 most valuable crop in Alaska, Colorado, Massachusetts, Nevada, and Oregon. 
  • Cannabis is currently worth between $500-$3,000 per wholesale pound across the United States. 

Alaska

  • The cannabis crop is worth more than twice as much as all other agricultural products combined in Alaska, including livestock and crops. 
  • Alaska’s 356 licensed cannabis farms produced 21 metric tons of cannabis during the fiscal year ending June 2021, which was worth $104 million wholesale.
  • Hay, Alaska’s second most valuable crop, generated $9 million annually during the last fiscal year. 

California

  • There’s an estimated seven cannabis farm licenses for every adult-use store in California, creating a lopsided cannabis market in the state. There’s more product than there are stores to sell it. 
  • California harvested 514 metric tons of cannabis last year, yielding a wholesale crop of $1.66 billion. Big numbers, but Colorado farmers are growing more cannabis than California farmers and bringing in approximately the same amount of money.

Colorado 

  • Colorado farmers produced an estimated 627 metric tons of cannabis in 2020, according to the Colorado Enforcement Division’s 2020 year-end report
  • Colorado has 1,245 cannabis farm licenses.
  • Colorado’s cannabis was valued at $1.03 billion last year.

Oregon

  • Oregon has an estimated 1,319 cannabis farm licenses, which produced 344 metric tons of cannabis last year.
  • The crop was valued at $602 million last year.
  • It’s the most valuable crop in Oregon, beating hay, wheat, potatoes, and cherries.

What’s a pound worth? 

Leafly found that using Nevada’s rules set forth by state regulators to be the most clear-cut way to break down just how much a pound is worth in the United States. 

Nevada taxes cannabis farmers according to a pre-set “Fair Market Value at Wholesale.” Flower is $2,398/lb, small bud is $1,696/lb, flower approved for extraction is $568, trim approved for extraction is $546, trim is $550, wet whole plant is $297, and immature plants are $51. Leafly rounded up and adapted Nevada’s numbers to create a per-pound formula. Every pound of dry, harvested cannabis yields: 

Flower, ½ pound: $2,400 x ½ = $1,200 

Smalls, ¼ pound: $1,700 x ¼ = $425 

Trim, ¼ pound: $550 x ¼ = $138 

Each harvested dry pound of cannabis equals $1,763 of wholesale crop value. 

Let’s treat cannabis farmers like other farmers

Cannabis farmers did not receive any of the $35 billion in emergency pandemic aid to American farmers in 2020, nor do they get to claim any of the $10 billion already given in usual farm subsidies, despite generating billions of dollars in legal revenue to U.S. states each year. 

  • There’s an entire council dedicated to iceberg lettuce in Arizona, but no such council or research group exists for cannabis, which is Arizona’s second most valuable crop generating $360 million in revenue each year.
  • Strawberry farmers pay no cultivation tax in California, unlike cannabis farmers who pay $9.65 per ounce just to cultivate. 
  • 19 towns have banned cannabis farming in New Jersey, including processing and retail. 

Leafly’s annual reports continue to shed light on the dollar value cannabis brings to state governments and communities, while simultaneously not being awarded the same benefits as other farmers in the United States. 


Gretchen GaileyDecember 22, 2020
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4min1801

Editors Note: This is part two of a three-part series.

Blue Dream, Purple Haze, Girl Scout Cookies, Red Headed Stranger, Acapulco Gold, Fruity Pebbles or Pineapple Express… all classic strain names and all of them meaningless.

“Strain names are absolutely misleading with considerable variation in the same cannabinoid content among different specimens of the same strain. You can get the same color and the same smell, but actually levels of the THC and CBD and some of the other compounds could be quite different,” says Robin Marles, Ph.D., chair of the U.S. Pharmacopeia (USP) Botanical Dietary Supplements and Herbal Medicines Expert Committee.

USP has assembled an expert panel of clinicians, scientists and industry representatives from around the world to provide necessary information and guidance on critical quality attributes, including recommendations for naming , all laid out in an article in the Journal of Natural Products, Cannabis Inflorescence for Medical Purposes: USP Considerations for Quality Attributes.

“USP recommendations are entirely focused on the inflorescence of the cannabis plant, popularly known as the flower or ‘the bud.’ And as with any plant product, the first challenge was to determine how to classify the various varieties and subtypes that are currently in use.” said Ikhlas Khan, Ph.D., USP’s Cannabis Expert Panel chair.

USP has elected to recognize cannabis as a single plant species, Cannabis sativa L., with different varieties or subtypes that can then be classified based on their THC and CBD content. The expert panel provided guidance for organizing the plant material into three “chemotype” categories: THC-dominant, CBD-dominant, or intermediate varieties that contain physiologically meaningful levels of both – intending to give prescribers or consumers greater clarity about what substances they are using.

In order to properly identify and quantify these cannabis varieties, USP’s expert panel recommended the use of science-based analytical procedures for the industry to employ.  This entails the use of high-performance liquid chromatography (HPLC) and gas chromatography (GC) to separate and quantify not just THC and CBD, but also 11 other cannabinoids that are less studied, but may also have an impact on the effect of cannabis products.

USP  has also looked at the composition of terpenes, which are largely responsible for the flavor and odor of cannabis. They identified five different terpenes that are especially abundant in cannabis that could also help with classification: myrcene, limonene, terpinolene, pinene and caryophyllene. Terpenes may form the basis for further subcategorization of cannabis chemotypes to establish the impact of these substances on the pharmacological effects of cannabis products when used in clinical practice. 

“Naming cannabis varieties based on detailed profiles of cannabinoid and terpene content can also help guide prescribers and help ensure that patients are consistently receiving the cannabis varieties that they intended,” said Nandu Sarma, Director, Dietary Supplements and Herbal Medicines at USP.

 


StaffOctober 28, 2020
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7min2220

Editors Note: This is a guest post.

As a cannabis grower, small increases in your profit margins can make a big difference in the success of your business. And if you want to scale your operations, you need to focus on getting the small details squared away.

5 Ways to Increase Profitability

As cannabis becomes destigmatized as a legitimate industry, it’s imperative that growers and retailers become even more focused on cleaning up business processes and optimizing for profitability. Here are some specific ways you can do just that:

  • Get to Know Your Numbers

 

You can’t strategically boost profit margins if you don’t know what your profit margins are to begin with. To find your profit margin, simply subtract your total business expenditures from your total revenue. This provides your net income. Then take your net income and divide it by your total revenue. This leaves you with your profit margin. 

It’s also important to know metrics like how much it takes you to produce an ounce or a gram of marijuana; how much you can sell different products for; which products are most profitable; which products have lower margins; etc.

You don’t need to be a CPA to understand the basic numbers behind your business. Any time you invest in analyzing this side of your company will serve you will over the long run.

  • Optimize Floor Space

 

As expensive as warehouse space is in most parts of the country, it makes sense that you’d want to make better use of your floor space. In fact, optimizing your floor space is one of the smartest things you can do to boost profits. The more you can grow within a limited footprint, the better your numbers will be.

In addition to vertical cultivation strategies, which allow you to make better use of limited space, you should find the correct crop density for each specific strain you’re growing. 

“When you begin to work with tighter plant density, your nutrient requirements are less, you can utilize labor better, you can more easily cycle plants so your harvest can [be continuous],” says Jim Ott, CEO of Precision Cultivation, which focuses on plant genetics. “If you’re making it like a manufacturing [facility], in terms of your workflow, those are ways to bring some efficiencies.”

Ott encourages growers to stop thinking in terms of traditional measurements, like pounds per bulb, and instead focus on more comprehensive formulas and calculations, such as cost per square foot. 

  • Automate Where You Can

 

Anything you can do to reduce labor with automation is going to benefit you in the long run. Labor is by far one of the greatest expenses. Whether it’s hand watering, trimming, moving plants around, or packaging, overreliance on laborers will cost you.

Automate wherever you can. One good option is to use automatic grow light lifters, which make it easier to move lights, increase production, and achieve more consistent and faster harvest rates.

A fertigation system is also useful. It will automatically inject important nutrients into your hydroponic grow, which eliminates the need for manual involvement. Again, major savings.

  • Consider Outside Investments

 

As the saying goes, it takes money to make money. If you’re struggling to scale your operation to the level that’s required to maximize profitability, perhaps you should think about welcoming in an outside investor. 

While there’s still a lot of red tape on cannabis business investments in the United States, restrictions are loosening, and more venture capitalists and investors are looking for ways to get involved. This could be a good way to inject some cash into the business and fund necessary improvements or expansion. 

  • Cut Energy Costs

 

Energy is obviously a significant expense. One strategy is to lower energy use by ensuring all equipment is appropriate to the specific needs of your site. Under- or over-sized equipment can dramatically impact energy efficiency, hurt production, and kill cash flow. Furthermore, you need to know the hours of peak demand so you can minimize energy use during these hours. 

Ready, Set, Grow!

The beauty of our industry is that there are so many different strategies, business models, and avenues for success. But regardless of which paths you choose to pursue, profitability must be one of your primary concerns. And the more you’re able to grow your profitability, the more you’ll be able to scale and expand in ways that are meaningful.


StaffAugust 19, 2020
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8min208610

Editors Note: This is a guest post. 

If you grow marijuana for a dispensary or personal use, you should know these tips. This guide lists 7 marijuana growing tips every grower needs to know.

In case you didn’t know, CBD is now legal in 33 states, and medical marijuana in the remaining 17. That means that you can grow your own marijuana and make a living out of it. However, making a killing off the trade isn’t as easy as throwing marijuana seeds on the ground and harvesting liters of CBD oil.

Any serious marijuana grower knows that growing marijuana is incredibly difficult. Growing quality marijuana takes lots of diligence, commitment, and resources.  With the right marijuana growing tips; however, growing your own marijuana will be a piece of cake.

Even the most seasoned marijuana growers sometimes have a hard time getting a good yield. However, here is a couple of invaluable marijuana growing tips for both newbies and experienced growers.

  1. Great Genetics Are Everything

You don’t have to be a master marijuana grower to know that your marijuana is only as good as its genetics. The first step to growing some good marijuana is finding an excellent cannabis strain, and there are plenty to choose from. So the million-dollar question is, where do I find quality marijuana strains?

Finding the best weed strains is as simple as searching for them on the internet. You’ll find plenty of seed sellers online who can get you high-quality strains.  You can use the strain finder from Cannaconection to get a great strain.

However, remember to only buy your cannabis from a reputable seller for the best seed. Some swindlers will sell you schwag seeds for the price of a high-quality strain.

If you find a great strain, remember to take proper care of it for the best results.

  1. Always Grow Inside

If you want the best weed, then always grow your weed inside and not outside. Not saying that your weed won’t grow outside, but it’s highly unlikely you’ll get the results you want.

Growing inside gives you more control of the climate and the entire growth process.  Inside is also way hygienic than outside, making it perfect for growing marijuana.

Also, you don’t need an entire greenhouse to grow your marijuana indoors. You can use a few grow boxes that measure a few inches, and your results will be just as stunning. Check out these grow boxes from Bloom by Botanicare and see how they work for you.

  1. Have Proper Lighting

Growing marijuana indoors requires a lot of care, and one aspect you can’t overlook is the light. Outdoor marijuana plants have the privilege of receiving natural light from the sun. Since you’re growing yours indoors, you’ll have to make up for the absence of natural light.

To have your lighting in order, invest in high-quality lights, ballast, reflectors, and hoods. Always remember to change the bulbs at least twice a year.  Only settle for high-quality bulbs, the second-grade bulbs are just as good as an ordinary light bulb.

  1. Have Strict Bedtimes

Most cannabis strains have a short growing cycle of about eight weeks. As such, you need to have them reach their full potential in just two months.

One way of doing so is by having consistent “day” and “night” times. It’s best if they have about twelve hours of darkness and twelve hours of light each day.

Maintain this cycle for the entire two months, and you’ll grow some healthy cannabis. If you use smart lights, you can set them to turn off after twelve hours automatically and turn on again after another twelve hours.

  1. Take It Phase-By-Phase

Each phase of the marijuana growing cycle has different requirements. In the first growth stage, the plant requires a lot of nitrogen to grow and bloom. During the last stages of the plant’s life cycle, it requires virtually no nitrogen.

If you give it a lot of nitrogen during the last growing stages, then it may end up with a nasty metallic taste.  As such, you need to be keen on what you feed your plant at each stage of your life cycle.

  1. Be Careful With What You Feed Your Plants

Nutrient companies will hurl empty promises at your face, and you’re likely going to take the bait. When what they promise seems a bit unrealistic, then it’s probably not true. So don’t spend your money on expensive nutrients that do nothing for your plant.

Also, be on the lookout for knock off nutrients. They do more harm than good for your plants. You can spot knock-offs by their ridiculously low-price tags as compared to the original.

It’s also a good idea to stick to base element nutrients as opposed to pre-mixed ones. You can buy different base element nutrients and mix them by yourself. That way, you can give your plants exactly what they need.

  1. Water Quality Matters… A Lot

All water is not the same because of the quantity and types of dissolved solids in it. These dissolved solids can adversely affect the plant, depending on what they are.  Domestic water is a definite no-no because of the chlorine and fluoride used to treat the water.

These chemicals won’t kill your plants, but you won’t get the best results either. If you really want the best from your plants, then invest in a filtration or reverse osmosis system. Once you do, always remember to change your filters frequently for the best water quality.

It’s Now Upon You to Implement These Marijuana Growing Tips

The quality of your marijuana all rests on the attention and care you give to your plants. With these few marijuana growing tips, you’ll be growing the best marijuana in town.  Remember, it’s completely okay to invest a little money on your marijuana plants.

Most importantly, treat your plants like your babies and nurture them to healthy, blooming adults. While your cannabis plants grow, be sure to check out other informative pieces on the site.

 


Debra BorchardtDecember 5, 2018
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6min1140

When a company is caught growing cannabis illegally, it’s often the landlord who’s left to clean up the mess. The criminals rarely come back for their equipment and the police want nothing to do with it either.

So, the landlord is confronted with clearing out sometimes hundreds of sophisticated, expensive lights, watering systems, and other various cultivation items in order to get the space back to rent. Metal scrapper and the owner of CH Hydroponics James Robba stumbled into the market when he was asked to disassemble a huge illegal grow.

Initially, he tried taking the lights apart to sell for scrap metal. Then he found that he could make more money keeping the lights intact and reselling them versus taking the lights apart. He began testing the lights to see if they worked and when they did he began selling them. “I was getting between $200 and $250 per ballast,” said Robba. For the uninitiated, ballasts run grow lights that are used in indoor grows.

After selling off his first tear down, he began running ads on Craigslist offering his demo work in order to get more second-hand equipment. “We started tearing down huge grows,” he said. “People that get busted don’t go back for their equipment.” He said building managers and landlords began calling him.

“We’ve seen gnarly stuff,” said Robba. “We’ve seen people tunnel down, right through a foundation, down 20 feet to tap into the main power line.” He has disassembled illegal grows with 500 lights making these $5-$6 million illegal operations.

Busted

You would think that it’s the landlord who has called the police and informed them about the illegal grow. But Robba said instead it’s usually disgruntled employees who end up tipping off the police. He told one story about an unhappy employee who knew the building didn’t have security guards on Sunday, so he went there with the intention to steal. Instead, he set off a silent alarm which automatically called the police. Oops.

Another way that illegal grows are discovered is that cities are using drones to find buildings with excessive amounts of HVAC equipment on the roof. Most buildings will have a few of these mechanical units on the roof, but a grow could have as many as 40. A telltale sign of something unusual.

Then there’s the smell. Robba said one operation without thinking opened a roof panel on the building, thus letting out the fragrant aroma of its cannabis plants. Neighbors complained and called the police.

Code Violations

With all these illegal grows getting busted and torn down, one would think people would be going to jail but that isn’t happening. Police departments found it wasted time and money to go after the lawbreakers. An operation one block from the police station in San Bernardino was busted with over 25,000 plants and no one went to jail.  Instead, cities found that good old-fashioned building codes and civil penalties were the way to go.

It’s very black and white. There is no way to argue building codes. It removes the police and courtrooms from the equation. It’s very easy for a city to tag a property with a building code violation and charge the owner with fees and penalties. Five tons of HVAC equipment on a roof is a dangerous situation for the occupants inside because in general buildings aren’t able to withstand that amount of weight.

It’s a violation and the city can earn big money by charging an owner a daily penalty until the building comes back into compliance. So, rather than spend money on police and attorneys to shut down an illegal grow, the city can instead earn money and still have the same outcome. This incentivizes the owners and landlords to fix the situation as quickly as possible.

Used Equipment

If the equipment is cheap and old, Robba will charge the owners to remove it. If it’s high quality, then they pay the landlord a reduced rate to demolish the grow. Robba said he does about two a month, but then added he’s already done three this past month. A new light can cost $250 each, while Robba pays about $20 for each ballast, he can resell them for roughly $75.

He believes the high tax rate of legal cannabis companies in California is creating the shadow black market. While many hobbyists buy his used equipment, he also believes that plenty of small black market operators are buying it as well. Still, he said it is getting harder for the illegal grows to stay in business as the city cracks down.

He doesn’t condone breaking the law, but he said the disruption of legalization has hurt the small operators who will now need to turn to other forms of business to make a living. Other things that could be more harmful than a small grow operation.


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